EMI returns to profitability

Moves by EMI to slash costs paid off today after the music group returned to profitability despite a further slide in sales.

The group, recently demoted from the prestigious FTSE 100 Index and home to stars such as Robbie Williams and Kylie Minogue, has been rocked by a stagnant record market.

Recorded music head Ken Berry, credited with signing the Spice Girls, quit last year with a a £6m (€9.4m) pay-off and was replaced by Alain Levy.

He has set about overhauling the core division, unveiling plans to cut 1,800 jobs – one fifth of the workforce – and reduce the number of artists.

EMI, which recently re-signed Robbie Williams for a reported £80m (€125.4m), said the moves appeared to be paying off.

Interim results, the first since EMI’s demotion from the top flight, showed turnover fell from £1.07bn (€1.68bn) last year to £961.5m (€1.51bn) in the six months to September 30.

But pre-tax profits before one-off costs were £42.2m (€66.1m) – against losses last year of £2m (€3.1m).

Chairman Eric Nicoli said: “These results reflect another solid performance from EMI music publishing and demonstrate the scale of success of the changes we have implemented in EMI recorded music in the year since Alain Levy’s appointment.”

But it was not all good news for investors, and Mr Nicoli warned of no immediate turnaround in conditions.

“In the second half of the financial year, we expect the global recorded music market to continue to decline, but at a reducing rate,” he said.

“The market weakness will now result in full-year sales in recorded music below last year’s levels.”

However, Mr Nicoli added that margin gains in recorded music and strength in music publishing meant EMI expected to deliver a full-year improvement “at all levels of profitability for the group”.